James Knightley, senior economist at ING, said: “Given Labour’s Left wing tax and spend manifesto and desire to nationalise the utility, rail and mail industries, markets are not going to react well if this is the outcome.

“The fear of higher deficits and national debt is leading to a spike in government bond yields.

“Meanwhile the greater chance of a Scottish Independence referendum in the next couple of years (Labour may have to offer this to get the support of the SNP) will intensify political uncertainty and it is already weighing heavily on the pound.”